• Are Attorney's Fees Recoverable in an ERISA Disability Denial Case?Are Attorney's Fees Recoverable in an ERISA Disability Denial Case?

Can I recover attorney fees if my long-term disability claim is governed by ERISA?

We regularly receive this question from disability claimants. The answer is YES, attorney fees are recoverable in ERISA long-term disability claims, but they are not guaranteed and the award is discretionary with the judge. The statute that gives courts the discretion to award attorney fees is 29 USC 1132 (g)(1) and it states in pertinent part, “In any action under this subchapter (other than an action described in paragraph (2)) by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney’s fee and costs of action to either party.” Disability carriers will always challenge an award of attorney fees.

The United States Supreme Court in the case of Hardt v. Reliance Standard has stated the following circumstances under which a court may award attorney’s fees:

a claimant must show some degree of success on the merits before a court may award attorney’s fees under § 1132(g)(1). A claimant does not satisfy that requirement by achieving trivial success on the merits or a purely procedural victory, but does satisfy it if the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether a particular party’s success was ‘substantial’ or occurred on a central issue.

In addition to the above criteria a district court may also consider the following five factors in deciding whether to award attorney fees:

  1. the degree of opposing parties’ culpability or bad faith;
  2. the ability of opposing parties to satisfy an award of attorney’s fees;
  3. whether an award of attorneys’ fees against the opposing parties would deter other persons acting under similar circumstances;
  4. whether the parties requesting attorney’s fees sought to benefit all participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding ERISA itself;
  5. the relative merits of the parties’ positions.

The following legal cases around the country discuss the established five factor test, Quesinberry v. Life Ins. Co. of N. America, 987 F.2d 1017, 1028-29 (4th Cir. 1993) (en banc), and other courts of appeals have used this test to determine whether to award fees. See Eddy v. Colonial Life Ins. Co. of America, 59 F.3d 201, 206-07 (D.C. Cir. 1995); Gray v. New Eng. Tel. & Tel. Co., 792 F.2d 251, 257-258 (1st Cir. 1986) (citing cases from Second, Third, Fifth, Eighth, Ninth, Tenth, and Eleventh Circuits adopting test); Sec. of Dept. of Labor v. King, 775 F.2d 666, 669 (6th Cir. 1985). The Seventh Circuit has used two tests, including the five-factor test, to determine whether fee awards in ERISA actions are justified. Bowerman v. Wal-Mart Stores, Inc., 226 F.3d 574, 592-93 (7th Cir. 2000) (describing five-factor test and “substantially justified” test). The Seventh Circuit does not consider the two tests to be meaningfully different. See id.

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There are 8 comments

  • Jan, you cannot take legal action against the LTD insurer to cover the costs of your legal fees.

    Jay SymondsJan 18, 2019  #8

  • I currently receive LTD benefits. In 2008 I hired a LTD attorney to appeal the first denial. Then January 2009 benefits stopped for an entire year. My attorney got my benefits restored in late 2009. The attorney gets 1/3 of my benefits every month. This is an ERISA claim. Can I take legal action against the LTD insurer to pay for my legal fees? I should receive the full benefit.

    JanJan 17, 2019  #7

  • Paul, you will need to discuss your questions with an account or tax professional to determine what you can do with respect to deductions.

    Stephen JessupJan 17, 2018  #6

  • I’m preparing my documents to file my 2017 return. My LTDI Attorney was able to get MetLife to recover backpay and restore my monthly payments. Can I deduct a percentage of attorney fees paid to litigate and recover 28 Months backpay owed and litigation to restore long term disability insurance payments?

    Paul D.Jan 16, 2018  #5

  • Kevin, no. There is no entitlement to attorney fees if you prevail at the administrative appeal level.

    Stephen JessupMay 5, 2017  #4

  • If my claim is covered by ERISA and I win an administrative appeal can I recover attorney fees?

    Kevin H.May 2, 2017  #3

  • KGT,
    An ERISA claimant never goes to court for an APPEAL as an appeal is a letter with supporting documents which is submitted directly to the insurance company. In 99% of the ERISA lawsuits a claimant also never has to court as the Judge will not allow testimony from the claimant.

    Gregory DellJan 2, 2013  #2

  • If a claimant has to go to court for an ERISA appeal do they “literally” have to sit in the courtroom? How can a disabled person sit in on a lengthy courtroom battle? Thank you.

    KGTDec 31, 2012  #1

FAQ

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, GoToMeeting.com sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

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Christina R.

GREGORY DELL IS THE BEST IN THE BUSINESS!

I was referred to Greg by a very well-respected attorney where I lived at the time, and he described Greg as not only one of the top attorneys in his field, but the BEST in the COUNTRY at what he does! After having interviewed other attorneys for my case that I did not quite feel right about, I contacted Greg and it was a very refreshing encounter, to say the least! He was very compassionate in regards to my health situation, and had had experience with other clients in the past who had been in the same industry as I had… and whom he had also very successfully represented. He was strong, confident and extremely intelligent.

His knowledge of the law was unsurpassed, and he had impressive Insight and expertise in dealing with insurance companies. Greg has successfully represented me now for over six years, and I honestly could not have handled the stress involved with working directly with the insurance company – in my fragile condition – without him! He and his highly-professional Staff have taken over my claim so that I can be worry-free and focus totally on my health and wellbeing. Greg is a master at what he does and I have the utmost respect for him. I have entrusted my whole livelihood in his and his capable Staff’s hands, and I feel totally confident in their ability to represent me in the best possible way, as well as to protect my very best interests. Most importantly, Greg has given me peace of mind at a very difficult time in my life. And, he has done it with kindness, compassion and honesty. His positive attitude and wonderful personality also make it a joy to work with Greg. He has been the ultimate blessing in my life since this unfortunate illness, and I sincerely feel so grateful to have found him!

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